Ms. Bridgett Wagner
Director,
Coalition Relations
The Heritage
Foundation
214 Massachusetts
Ave. N.E. Washington, D.C. 20002-4999
Dear Bridgett:
I am very pleased to provide you
with some examples of the success that the Pacific
Research Institute has been able to enjoy as a result of having the Cal- STAMP
model of the California economy. PRI is now in its second year of using the model
and it has proved to be a very valuable tool for our important work in the
state in the area of taxation.
For example, in 2000, Assemblywoman
Carol Migden (D-San Francisco) introduced a bill that would have resulted
in further taxation of the internet in California. Based on the research results
coming from the Cal-STAMP model showing significant job loss in the state
if the tax were implemented, Governor Gray Davis vetoed the legislation. This
study's findings, based on the model, received prominent media
coverage throughout the state, including the front page of the Business Section
of the San Francisco Examiner.
In June of this year, PRI published
its bi-annual California Legislators' Guide 2001. This
guide has proved to be extremely popular with members of both sides of the
legislature. The 2001 edition contained two chapters on Taxation and Budget.
Based on the results from the model, author Erik Bauman was able to make clear
recommendations for legislators on promoting the fiscal
health of California. The launch took place at a barbecue luncheon on the
grounds of the State Capitol. It was very well attended by legislators and
their staffers. A lively question and answer period ensued.
In July, when Republicans in the
California legislature dug their heels in for a protracted budget fight, they
relied on PRI data to bring their anti-tax message home. The standoff was
over an automatic quarter-cent reduction in the state sales tax that was triggered
when the California budget surplus was booming. When the Governor started
using up the surplus faster than anticipated, the Democrats wanted to reinstate
the tax.
Relying on data from one of the
chapters in the California Legislators' Guide 2001 cited
above, Republicans were able to show that the sales tax could cost California
over 150,000 jobs by 2004. Assembly Leader Dave Cox and Assemblymen Strickland
and Runner all cited data on the Assembly floor and in op-eds throughout the
budget battle. The impasse finally ended in a partial victory for the Republicans
and Californians —the final budget passed changes the formula by which the
tax will be triggered.
Dr. Lawrence McQuillan, Director
of PRI's Center for Entrepreneurship and Mr. Chris Middleton who has responsibility
for the model, will be visiting state legislators this Fall to further demonstrate
the capabilities of the model. Included in their presentations to legislators
will be the impact of tax changes on the budget and employment.
These are just a few examples of
the exciting work and impact that the Pacific Research Institute has been
able to have using the Cal-STAMP model developed by David Tuerck and his staff
at the Beacon Hill Institute in Massachusetts.
Sincerely
Sally C. Pipes
President
& CEO
Pacific Research Institute